‘The paths Google could take to develop a bigger presence in the gaming industry are varied. With its financial war chest, the company could easily acquire one or several casual game development houses, using those to deliver in-game advertising via Adscape.

‘For instance, visitors to Pogo.com and RealArcade tend to be women over 35, and they are already used to seeing advertising with their games--sometimes particularly intrusive advertising. If Google were to introduce a more subtle style--similar to the AdSense ads it has been so successful with--it could prove appealing.

‘The company could just as easily acquire a top- or mid-tier developer and court the hardcore PC gamer. This group, typically males under 35, tends to resist in-game advertising, but might be more willing to put up with it in exchange for a free AAA game…

‘Google also has several existing technologies that could be used to create games. Imagine a flight simulator that uses Google Earth as a backdrop or tracking a spy in a major city via Google Maps' street view. While there would still be significant work required to create a game using these tools, the underlying technology is already fundamentally finished.

‘While most videogame makers rely heavily on brick and mortar retailers to drive sales (something Google isn't currently set up for), digital delivery is a rapidly growing industry. Valve Software has seen success with its Steam delivery system. And Electronic Arts has been pushing its online store more heavily in recent months. The money's not as good, but the growth potential is significant. And Google has the bankroll to wait for the growth to come…

‘There's no question the company wants a part of the $18 billion videogame industry. The real question is: What is it planning to do to get it?’

MCV is the leading trade news and community site for all professionals working within the UK and international video games market. It reaches everyone from store manager to CEO, covering the entire industry. MCV is published by NewBay Media, which specialises in entertainment, leisure and technology markets.